The Courier & Advertiser (Perth and Perthshire Edition)
Criticism of land tax after £1.7m sale collapses
St andrewS: Massive tax bill was the ‘deal-breaker’ for American investor
An American golf enthusiast who backed out of a deal to buy a £1.7 million house in St Andrews is among investors being deterred by Scottish land tax.
Entrepreneur Terry Winters, 74, was horrified by a £162,000 property tax bill to buy a Georgian townhouse overlooking the Old Course.
He branded the Scottish Government’s land and building transactions tax (LBTT) discriminatory, as it made it around £50,000 more expensive than buying a similar property south of the border.
Another American buyer abandoned the £850,000 purchase of Drumkilbo House, in Perthshire, last week as he faced tax of £60,350 – almost double the £32,500 stamp duty would have cost.
Quoted in the Sunday Times, Mr Winters, of Scottsdale, Arizona, said: “The prospect of being landed with such a huge tax bill up front was a dealbreaker, and it will be for many others.
“It made me feel that my investment wasn’t wanted.”
Ministers have been urged to review the tax, which replaced stamp duty in Scotland in April 2015, amid a warning it is hampering sales and investment.
The tax was brought in with the aim of creating a charge more proportionate to the actual price of the property, using a sliding scale.
It means a property costing £350,000 will result in tax of £8,350 instead of stamp duty of £7,500 but those over £1m would have £78,350 in LBTT compared with £43,750 in stamp duty.